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Global Innovation Index 2016

The Global Innovation Index (GII) 2016 is an annual publication which features a composite indicator that ranks countries/economies in terms of their enabling environment to innovation and their innovation outputs. The GII covers 141 economies around the world and uses 79 indicators across a range of themes. The Global Innovation Index 2016 was created by Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO). The theme of the 2016 Global Innovation Index (GII) is ‘Winning with Global Innovation’.

Here is an overview of the indicators that are used to create the innovation index and how they are related:
Global Innovation Index factors

And this is how the measures are calculated:

  • The Global Innovation Index is the simple average of the Input and Output Sub-Indices.
  • The Innovation Efficiency Ratio is the ratio of the Output Sub-Index over the Input Sub-Index.
  • The Innovation Input Sub-Index is the simple average of the first five pillar scores.
  • The Innovation Output Sub-Index is the simple average of the last two pillar scores.

Global Innovation Index Ranking

Here is the 2016 ranking for the Global Innovation Index. Switzerland, Sweden, the United Kingdom (UK), the United States of America (USA) and Finland are the world’s five most-innovative nations:

  1. Switzerland
  2. Sweden
  3. United Kingdom
  4. United States of America
  5. Finland
  6. Singapore
  7. Ireland
  8. Denmark
  9. Netherlands
  10. Germany

The Netherlands falls five ranks to 9th place, mostly driven by an FDI-related (Foreign Direct Investment) variable and missing data points.

The GII rankings have shown a remarkable level of global diversity among innovation leaders over the years. Among the top-ranked 25 innovative nations this year are not only economies from Northern America (such as Canada and the USA) and Europe (such as Germany, Switzerland, the UK and the Netherlands) but also from South East Asia, East Asia, and Oceania (such as Australia, Japan, Korea, and Singapore) and Northern Africa and Western Asia (Israel).

The distance between the performance of the top 10 ranked innovation nations and all others is still wide. The innovation divides remains in 2016 according to the GII 2016.

The Netherlands in the Global Innovation Index

The Netherlands has been ranked in the top 10 economies of the GII since 2008. It’s fall on the ranking this year is largely because of methodological considerations (see below). This year its ranking is affected by its lower ranks on both the Innovation Input Sub-Index (12th) and the Innovation Output Sub-Index (9th).

The Netherlands achieves a top 25 ranking among all economies for all pillars of the GII, with a better ranking this year in Infrastructure (12th) and Business sophistication (9th). Conversely, the Netherlands’ performance falls at the pillar level in Knowledge and technology outputs, where it ranks 16th overall. This change is mainly a consequence of lower rankings in the Knowledge diffusion sub-pillar (114th) and the indicator FDI net outflows (118th).

The latter indicator, identified as highly volatile in previous GII editions, partly drives the fall in the ranking of the Netherlands. Also, for some new variables—namely, IP receipts and ICT services exports — the Netherlands lacks data.

Global Innovation Index 2015

The Global Innovation Index (GII) 2015 is an annual publication which features a composite indicator that ranks countries/economies in terms of their enabling environment to innovation and their innovation outputs. The GII covers 141 economies around the world and uses 79 indicators across a range of themes. The Global Innovation Index 2015 was created by Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO).

Here is an overview of the indicators that are used to create the innovation index and how they are related:
Global Innovation Index factors

And this is how the measures are calculated:

  • The Global Innovation Index is the simple average of the Input and Output Sub-Indices.
  • The Innovation Efficiency Ratio is the ratio of the Output Sub-Index over the Input Sub-Index.
  • The Innovation Input Sub-Index is the simple average of the first five pillar scores.
  • The Innovation Output Sub-Index is the simple average of the last two pillar scores.

Global Innovation Index Ranking

Here is the 2015 ranking for the Global Innovation Index. Switzerland, the United Kingdom (UK), Sweden, the Netherlands, and the United States of America (USA) are the world’s five most-innovative nations; at the same time, China, Malaysia, Viet Nam, India, Jordan, Kenya, Uganda, and a group of other countries are outpacing their economic peers in 2015. Global Innovation Index Ranking

The top 25 countries in the GII consistently score well in most indicators and have strengths in areas such as information and communication technologies and business sophistication, which includes knowledge workers, innovation linkages, and knowledge absorption; they also create high levels of measurable outputs including creative goods and services.

Technology Gap

On average, the technology gap between developing and developed countries is narrowing. One explanation for this phenomenon is that more and more developing countries outperform in innovation inputs and outputs relative to their level of development.

By tracking global progress in innovation and focusing on those developing countries that out- perform in innovation compared to countries at similar levels of development, the GII can be used to monitor progress in innovation and identify areas of strengths and weaknesses in innovation efforts.

At low income levels, countries that outperform their peers focus on removing structural obstacles to innovation, such as poor access to finance and poor linkages within the innovation systems. At higher income levels, efforts concentrate on increasing investments, spurring growth in innovation outputs, and improving human capital.

Research and development (R&D) is one of the key policy areas that can secure technological potential and, therefore, innovation and economic growth. In order to reach the income levels of high-income countries, low- and middle-income countries need to expand their access to technology and their capacity to use it.

And digital?

Given the importance of strengths in areas such as information and communication technologies (ICT) for leading countries in innovation, it should be no surprise that the top 10 shares a lot of countries with the leader in the Digital Evolution Index. Especially since innovation is one of the underlaying drivers in the DEI.

Same remarks hold for the Digital Economy and Society Index. Only the latter is just focussed on Europe.